Oil futures were slightly lower early Tuesday, but off overnight lows, after a report from the Wall Street Journal that was being perceived as upbeat in long-running negotiations between the U.S. and China on tariffs.
The Wall Street Journal, citing unnamed officials from both parties, reported that U.S. and Chinese negotiators were laying the groundwork for a delay in a fresh round of tariffs set to kick in Sunday. The report indicated that the parties continue to “haggle over how to get Beijing to commit to massive purchases of U.S. farm products President Trump is insisting on for a near-term deal.”
Trade animosities between the world’s largest economies has been a headwind for crude oil demand and global economic growth in the past year.
West Texas Intermediate crude for January delivery CLF20, -0.03% were off 16 cents, or 0.3%, at $58.86 a barrel on the New York Mercantile Exchange, after sliding 0.3% on Monday.
February Brent crude BRNG20, +0.02% shed 10 cents, or 0.2%, to $64.13 a barrel on ICE Futures Europe, after skidding 0.2% a day ago.
Looking ahead, oil investors are awaiting inventory data from American Petroleum Institute later Tuesday afternoon and one on Wednesday from the U.S. Energy Information Administration.
Some market participants say that inventory could provide a fresh catalyst for crude after a meeting of the Organization of the Petroleum Exporting Countries and its allies last week agreed to steeper reductions to earlier agreed upon global production cuts.
“US crude stockpiles will be released tomorrow and expectations are for a slightly smaller draw of 2.8 million [barrels per day],” wrote Edward Moya, senior market analyst at brokerage Oanda, in a Tuesday research note.
“Oil prices may struggle to rally here as they are at the top of their recent trading and range and around the 2020 forecast for many analysts,” he said. “What also is not helping oil bulls is that Brent crude is currently trading near Saudi Arabia’s 2020 budget targeted average price of $65 a barrel,” he wrote.